What's the story with lending $4.5 million to THELMA in Fond du Lac?

You asked, we found the answer

Jul. 29, 2013

The former Windhover Center for the Arts, now known as the Thelma Sadoff Center for the Arts, is undergoing a $4.5 million facelift. The project includes an expansion of the existing facility. / Colleen Kottke/Action Reporter Media

Written by

Action Reporter Media

The former Windhover Center for the Arts, now known as the Thelma Sadoff Center for the Arts, is undergoing a $4.5 million facelift. The project includes an expansion of the existing facility. / Colleen Kottke/Action Reporter Media

More

ADVERTISEMENT

Editor’s note: Today in “What’s the Story?” we answer a question from a reader concerning the cost of expanding the new Thelma Sadoff Center for the Arts. “What’s up with the city borrowing $4.5 million to THELMA? How are they going to pay that back?”

The Fond du Lac City Council is expected to give final approval to the issuance of a $4.5 million Industrial Revenue Bond to assist with the renovation project at the downtown Thelma Sadoff Center for the Arts. A public hearing on the bond issuance was held early last week.

Fond du Lac Community Development Director Wayne Rollin said industrial revenue bonds do not cost city taxpayers anything.

“They are an economic development tool authorized under state and federal law to finance projects at below-market interest rates,” Rollin said. “Although the bond is issued in the name of the City of Fond du Lac, it would not represent a liability to the City and would not count against the City’s debt. In addition, the City would not be responsible for the bond or for any payments.”

Rollin said the use of an industrial revenue bond for the THELMA project was suggested by the project lender, National Exchange Bank.

“The industrial revenue bond allows the project to utilize a tax-exempt bond sold at a lower interest rate, thus lowering the overall financing cost,” said Rollin, adding that similar funding was used for the YMCA and McNeilus Steel construction projects.

THELMA Executive Director Kevin Miller said the $4.5 million construction loan will be paid back using already committed pledges.

“The project will be funded through pledges that go out five to seven years, so that’s why we need this bridge loan,” Miller said. “This project is being funded completely through philanthropic sources and doesn’t cost the city anything.”

Miller said that the center’s largest financial backers are many of the city’s largest employers.

“Many of our major employers began to realize that in order to attract, recruit and retain top-talented employees, they were going to need significant quality of life components in the community like a dynamic arts center, the YMCA or a children’s museum,” Miller said. “It’s a significant part of our success story.”

Miller said the arts center is also “blessed” to have the support of the Sadoff Family Foundation, the project’s lead funder.

“They are a big piece of this,” Miller said of the arts’ center resurgence.

The Thelma Sadoff Center for the Arts — formerly known as the Windhover Center for the Arts — will re-open at 51 Sheboygan St. in September after the expansion and renovations are complete.

“We are really excited about the grand re-opening on Sept. 10 and hope folks in the community will take pride in what the center will do for our downtown’s economic development,” Miller said.